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Thursday, March 19, 2015

St. Clairsville Receives Nearly $1.5 Million from Lease Deal with Rice Energy

From Gas & Oil:

The City of St. Clairsville in Belmont County, received a $1,479,251.84 check from Rice Energy at the city’s Jan. 20 council meeting in exchange for leasing just over 170 acres for oil and gas exploration.

Attorney Joshua E. O’Farrell of Tzangas, Plakas, Mannos, Ltd. represented St. Clairsville in the lease negotiation. O’Farrell stated during the meeting: “Not only were we able to negotiate a lease that protects the city’s property from an environmental standpoint, but we were able to negotiate a lease that will enhance the city’s economic well-being not only in the near term but for many years to come.”

In addition to the nearly $1.5 million dollars in up-front signing bonus, the lease requires that Rice Energy pay St. Clairsville a 20 percent gross royalty on all oil, gas, and hydrocarbons produced from the leasehold, and prevents the company from using any of the city’s surface property for exploration activity.

According to O’Farrell, St. Clairsville was fortunate to finalize its lease agreement with Rice Energy prior to the drop in oil prices.

This represents an $8,700 per acre signing bonus for the community. That's an impressive return.